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Brocade has reported losses for the first quarter of its 2013 fiscal year, blaming a tax charge for the poor results.

The networking firm had brought in record revenues of $588.7m for the three months – up by 5% year-on-year – whilst both its storage area networking (SAN) division and its IP networking business showed growth in the quarters, with revenues rising 3% and 11% year-on-year respectively.

However, the passing of Proposition 39 during the last US election – meaning multistate businesses are now forced to pay income taxes based on percentage of their sales in California – led to much higher tax bill than Brocade was used to.

In addition to the higher tax payments, the company also faced a one off charge of $15.3m for insurance costs it refinanced during the quarter, bringing the total losses reported by Brocade to $21.25m.

"Brocade achieved record revenue in Q1 based on strong performances in both our storage and IP networking businesses," said Lloyd Carney, the recently appointed CEO of Brocade. "As the new CEO, it is my top priority to ensure that the company continues to execute well in our core businesses to drive growth and shareholder value.

“Looking forward, I see new opportunities emerging in the networking industry due to disruptive IT market trends that are challenging the capabilities of today's networks. It is clear that customers are looking for new technologies and approaches in networking to meet these challenges.”

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